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International and Intergenerational Aspects of Capital Income Taxation in an Endogenously Growing World Economy


  • Yasushi Iwamoto

    (Faculty of Economics, University of Tokyo)

  • Akihisa Shibata

    (Kyoto Institute of Economic Research, Kyoto University)


This paper discusses how capital income taxation affects economic growth and welfare in an endogenously growing world economy with perfect capital mobility and worldwide externalities. Worldwide ex-ternalities provide a mechanism for equalizing national growth rates even with different capital income tax rates. The welfare of future generations is more influenced by a change in the growth rate than by the international spillover effect which has been the primary concern of the previous studies. Moreover, our model finds intergenerational conflicts arising from the change in the growth rate caused by a change in the source tax rate of the foreign country.

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  • Yasushi Iwamoto & Akihisa Shibata, 2007. "International and Intergenerational Aspects of Capital Income Taxation in an Endogenously Growing World Economy," CIRJE F-Series CIRJE-F-490, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2007cf490

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    References listed on IDEAS

    1. Yasushi Iwamoto & Akihisa Shibata, 1999. "Foreign Tax Credit and the Current Account," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(2), pages 131-148, May.
    2. Branstetter, Lee G., 2001. "Are knowledge spillovers international or intranational in scope?: Microeconometric evidence from the U.S. and Japan," Journal of International Economics, Elsevier, vol. 53(1), pages 53-79, February.
    3. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-149, January.
    4. Jeffrey I. Bernstein & Pierre Mohnen, 1994. "International R & D Spillovers between U.S. and Japanese R & D intensive sectors," Cahiers de recherche du Département des sciences économiques, UQAM 9406, Université du Québec à Montréal, Département des sciences économiques.
    5. Iwamoto, Yasushi & Shibata, Akihisa, 1991. "Capital income taxation and the current account in a small open economy," Journal of International Money and Finance, Elsevier, vol. 10(4), pages 480-496, December.
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    Cited by:

    1. Hashimzade, Nigar & Myles, Gareth D., 2010. "Growth And Public Infrastructure," Macroeconomic Dynamics, Cambridge University Press, vol. 14(S2), pages 258-274, November.
    2. Daisuke Amano & Jun-ichi Itaya & Kazuo Mino, 2014. "Trade Structure and Growth Effects of Taxation in a Two-Country World," CESifo Working Paper Series 4882, CESifo Group Munich.
    3. Colin Davis & Ken-ichi Hashimoto, 2015. "Corporate Tax Policy and Industry Location with Fully Endogenous Productivity Growth," Discussion Papers 1527, Graduate School of Economics, Kobe University.

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